German steelmaker ThyssenKrupp confirms steep full-year loss of $2.8 billion

ThyssenKrupp confirms steep full-year loss

FRANKFURT — German steel maker ThyssenKrupp AG on Friday confirmed that it had a steep net loss in its 2008-9 fiscal year and said it plans to reduce its work force by about 20,000 people — mostly through divestment.

ThyssenKrupp, based in Duesseldorf, said it lost €1.87 billion ($2.8 billion) for its full fiscal year compared with a net profit of €2.3 billion the previous year.

The drop was due to a number of restructuring charges and the impact of the global economic downturn on the industry. At the same time, the company faced construction costs for building up businesses in Alabama and Brazil.

Revenue for the period fell 24 percent to €40.5 billion from €53.4 billion in the previous fiscal year.

The company did not immediately release fourth quarter figures. Thyssen’s fiscal year begins in October.

Ekkehard Schulz, the company’s chief executive said in a presentation to reporters Friday that the company expected to cut about 5,000 jobs and that the rest of the payroll reductions would be made through divestment of units, though he didn’t specify what the company planned on selling off.

Last week, the company said it was selling its industrial services unit North American Safway Group to Odyssey Investment Partners LLC, a private equity company based in New York.

Safway, based in Waukesha, Wisconsin and Fort Saskatchewan, Alberta, rents and erects scaffolding for the commercial construction industry. That company had sales of more than US$700 million in 2008 and a work force of around 5,000 across the U.S. and Canada. ThyssenKrupp didn’t provide financial details of the transaction.

Thyssen said it expected a slow recovery for this fiscal year.

“Now that the world economy seems to have passed the worst of the recession, the new fiscal year 2009-2010 will be characterized by at best slow economic recovery,” Thyssen said in its report.

“As a result, there will be only moderate growth in order intake and sales. The group’s new organizational structure will make us leaner and more efficient. Together with the optimization programs we have introduced, this will have a positive effect on earnings.”

Thyssen said it expected sales to stabilize in the 2009-2010 fiscal year, and that earnings are expected to improve. The company said pretax earnings should be in the high three digit million euro range, measured by earnings before interest and taxes.

The company said earnings before tax would be significantly impacted by project costs and startup losses in the Steel Americas business area.

Shares of Thyssen were nearly unchanged at €23.93 in Frankfurt morning trading.

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